S.L. 325.6 Art. 7Rulesforarticles6, 7, 24B and 24C of the Act.

(1) The provisions of articles 6, 24B and 24C of the Act, and with effect from year of assessment 2003, the provisions of article 7 of the Act, shall only be applicable to expenditure which is qualifying expenditure as defined in these regulations: Provided that the provisions of article 7 of the Act shall only be applicable with respect to qualifying expenditure incurred in acquiring plant or machinery, or industrial buildings or structures as set out in the said article: Provided further that the provisions of this sub-regulation shall not affect the entitlement of any company in terms of article 5A of the Act, which article shall apply without regard being had to the provisions of this sub-regulation..

(2) Where the provisions of articles 6 and 24B of the Act are applied to a company which is not entitled to the incentive provided by regulation 5, the reduction in the rate of income tax shall be arrived at by multiplying nineteen and a quarter percentage points by the rate of tax at which the company is chargeable to tax in a year of assessment and dividing the product by the rate of income tax prescribed by article 56(6) of the Income Tax Act: Provided that where the company’s chargeable income, before applying the provisions of the said articles 6 and 24B of the Act, is taxable at different rates of tax:

(a) the reduction in the rate of tax shall be calculated separately for each part of the company’s chargeable income, as is so taxable at different rates of tax, as is set in this sub-regulation; and

(b) the profits which shall first be deemed to be re-invested for the purpose of article 6 of the Act shall, if the company by extraordinary resolution so resolves, be those profits which are chargeable to tax at the highest rate.